Tuesday's Federal Reserve Meeting Announcement

The Federal Reserve Open Market Committee voted Tuesday to keep the federal funds rate unchanged at zero to 0.25 percent, and retained its pledge to keep the benchmark rate "exceptionally low" for an "extended period." The Fed stated that the "economic recovery is on a firmer footing, and overall conditions in the labor market appear to be improving gradually." The committee said it expects that effects of higher commodity costs on inflation will be "transitory" and that it will continue to pay close attention to inflation expectations; however longer-term inflation expectations have remained stable and measures of underlying inflation have been subdued. In addition, the committee said it would keep to its plan to purchase $600 billion of Treasury securities by the end of the second quarter of 2011. The decision was unanimous.

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The Federal Reserve Open Market Committee voted Tuesday to keep the federal funds rate unchanged at zero to 0.25 percent, and retained its pledge to keep the benchmark rate "exceptionally low" for an "extended period." The Fed stated that the "economic recovery is on a firmer footing, and overall conditions in the labor market appear to be improving gradually." The committee said it expects that effects of higher commodity costs on inflation will be "transitory" and that it will continue to pay close attention to inflation expectations; however longer-term inflation expectations have remained stable and measures of underlying inflation have been subdued. In addition, the committee said it would keep to its plan to purchase $600 billion of Treasury securities by the end of the second quarter of 2011. The decision was unanimous.

SVB Asset Management, a registered investment advisor, is a non-bank affiliate of Silicon Valley Bank and member of SVB Financial Group. Products offered by SVB Asset Management are not FDIC insured, are not deposits or other obligations of Silicon Valley Bank, and may lose value. This material, including without limitation to the statistical...Read More